Starting July 6th, eBay will begin charging Final Value fees on the amount sellers charge for shipping services.
Currently, if you sell a $20 item on eBay and charge $5 for shipping, you’re assessed fees on the $20 final sales price.
As of July 6th, you will be assessed a Final Value Fee on the total order amount e.g. $20 item price + $5 shipping = $25 total order price.
While many sellers are aware of this upcoming fee change, the vast majority have yet to take actions to deal properly with the products they sell. Products that will soon start incurring higher fees with each sale.
And as with any economic or fee shift, how your business ends up, depends on the actions you take.
By not preparing for this ahead of time, you’re guaranteed to take a hit to your bank account when it comes time to pay your August invoice.
Who is Not Affected
If you currently offer products with Free Shipping, you will not be impacted by the upcoming fee change. Those who already list items with Free Shipping already payFinal Value Fees on the total order amount.
You may even benefit slightly from this change in policy, as eBay is reducing the percentage of Final Value Fees charged.
However, the vast majority of sellers will be affected negatively for at least some of the products they sell.
In working hundreds of students and private clients over the past several months, with business models that span hundreds of product categories; 97% sell products that will result in a fee increase.
This means it’s time for a change.
Who IS Affected
For 97% of sellers, moving to an “all free shipping” model without a serious review of your business is not the right course of action.
This includes sellers of:
- Heavy or odd-sized items. This new eBay FVF will increase your costs significantly.
- Products with low margins. A bigger bite will be taken out of your profits.
- Products with price sensitive markets. An increase in items costs can leave your customers with stick shock.
In a recent AuctionBytes article, I detailed several options for dealing with the types of merchandise listed above.
But it’s not an easy task, and it will take some time to prepare your product line for the upcoming fee change.
Which brings us to the bottom line – to succeed in your online business, you have to tackle the issue of eBay fees on FVFs head on… and win.
This isn’t something you can put off until July, otherwise your August invoice from eBay could present quite a shock.
“Tackling the eBay Shipping Fees… and Winning!” Teleseminar Series
To help sellers deal with one of the biggest fee shifts in eBay’s history, coming up this week, we recently held a 2-part teleseminar series designed to help eBay sellers assess their current model, provide tips and strategies on how to deal with the fee increases and help sellers rethink and reinvent their business models.